The Top 10 Business Stories of 2008

by Arkansas Business Staff  on Monday, Dec. 22, 2008 12:00 am  

John Glasgow, CFO of CDI Contractors, disappeared on Jan. 28. Dillard's owned a half-interest in CDI and was embroiled in a bookkeeping dispute with CDI management when Glasgow, of Little Rock, vanished.

The Arkansas Democrat-Gazette quoted Baker, chairman of the Legislative Council's Subcommittee on Higher Education, as saying he expected the General Assembly, which convenes Jan. 12, to address some of the university's problems, including compensation packages for high-level administrators and discretionary scholarships. Any such action likely would apply to all public colleges and universities in Arkansas.

6.) Energy Roller Coaster
The natural gas formation known as the Fayetteville Shale Play remained one of Arkansas' major energy stories in 2008, but it certainly wasn't the only one.

Windmill-turbine makers breezed into the state in a big way; gasoline prices roller-coastered from record highs to inflation-adjusted lows; a $1.5 billion coal-fired power plant remained tied up in legal wrangling with environmentalists; and the state's largest publicly owned energy company is getting a new boss.

The state moved toward becoming the wind energy capital of the United States. After the arrival of Danish-based LM Glasfiber in Little Rock last year, two more wind energy-related firms announced plans to locate here. In mid-December, Gov. Mike Beebe hinted at the possibility of a fourth windmill operation headed for Arkansas.

In October, Polymarin Composites, a Dutch company that makes rotor blades for the wind industry and is a wholly owned subsidiary of Emergya Wind Technologies, announced it would put a manufacturing facility in Little Rock. The plant initially would employ 630. Also, Wind Water Technology, a supplier to Emergya, said it would put an operation in the same facility and employ 200. The companies expect to begin operation in early 2009.

Rep. Vic Snyder, D-Ark., said lawmakers have identified energy as a top priority. "The No. 1 national security issue facing this country is energy," Snyder said. And Congress has approved tax credits for renewable energy companies.

Also in October, Nordex USA Inc., another manufacturer of wind turbines, said it would locate its U.S. manufacturing facility at Jonesboro. The German company said it would invest about $100 million in the new facility, which will employ 700. Production is expected to begin by January 2010.

LM Glasfiber Inc. officially opened its new North American headquarters in Little Rock. The company said it would invest about $150 million in the plant. Randy Fox, Glasfiber's North American general manager, said the wind power industry is expected to double in the next eight years and that energy demands will double by 2030.

In another energy development, an updated study by the Center for Business & Economic Research at the University of Arkansas at Fayetteville predicted that the production of natural gas in the Fayetteville Shale Play could result in an economic impact of $17.9 billion in Arkansas and 11,000 jobs during the next five years. The study also projected investment in the shale play could contribute about $1.8 billion in taxes through direct investment and indirect impact during the five-year period.

In a special session of the state Legislature, a compromise measure increased the severance tax on oil and gas from three-tenths of 1 cent per 1,000 cubic feet of gas to a base rate of 5 percent on proceeds, with lower rates for new and low-producing wells. Beebe estimated the measure would increase severance tax collections from about $600,000 a year to $57 million in 2009 and $101 million by 2014. Topping it off, a 187-mile natural gas pipeline is in the works for the Fayetteville Shale Play. Kinder Morgan Energy Partners LP of Houston and Energy Transfer Partners LP of Dallas are building the pipeline at an estimated cost of $1.3 billion.

Southwestern Electric Power Co.'s $1.5 billion, 600-megawatt power plant in Hempstead County has received approval at each step in a process that has taken more than two years, but environmental groups have slowed progress. They claim that the Arkansas Department of Environmental Quality failed to do an adequate analysis of the possible air pollution from the plant. Public service commissions in Arkansas, Texas and Louisiana have approved the proposed power plant, and a federal judge gave the go-ahead to continue work on the plant while the project moves through the appeals process. An administrative judge plans to hold a trial beginning March 9 on the latest appeal

Claiborne Deming, president and CEO of Murphy Oil Corp. of El Dorado, announced in August that he would retire on Dec. 31. David Wood, currently EVP of worldwide exploration and production operations, was chosen as his successor. Deming will remain on Murphy's board and will succeed William Nolan as chairman of the board's executive committee while Nolan will remain chairman of the board.



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